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Housing People; Financing Housing

Housing associations should be set free to raise money through methods like equity investment, claims a new report from Policy Exchange.

Housing People; Financing Housing says that so-called “equitisation” could raise £30 billion and build an extra 100,000 new homes a year.

The report’s author, Natalie Elphicke, says that using the housing association sector’s profits to raise money from organisations like pension funds would save taxpayers £5 billion in government grants, as well as helping solve Britain’s chronic housing shortages.

Renters’ rights – including security of tenancy – would not change under the proposals, which would only affect how housing associations raise money.

The report recommends associations should move towards social enterprise structures modelled on the successes of the Co-op, the John Lewis Partnership or BUPA.

Under these mutual models, investors use flexible methods like buying preference stock - where interest gets paid only when the housing association is in profit.  Housing associations currently rely on a mixture of government grant and private loans. 

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